The number of U.S. homeowners in forbearance plans fell to 115,000 in December from 130,000 the previous month, according to the Mortgage Bankers Association.
Washington – According to the Mortgage Bankers Association (MBA), 115,000 homeowners were in forbearance plans as of Dec. 31, and the total number of loans in forbearance was 0.26% of servicers' portfolio volume in the previous month. It decreased from 0.23% to 0.23%.
Fannie Mae and Freddie Mac's loan forbearance rate fell by 1 basis point to 0.15% in December. Ginnie Mae's loans in forbearance decreased 8 basis points to 0.39%, and the forbearance share of portfolio loans and private label securities (PLS) decreased 3 basis points to 0.27%. Mortgage servicers have provided forbearance to about 8.1 million borrowers since March 2020.
“Patience as a loss mitigation option is waning,” said Marina Walsh, vice president of industry analysis at CMB, MBA. “While patience is a powerful tool against a spike in delinquencies due to large-scale disruptions such as natural disasters or pandemics, today's borrowers are not facing widespread financial hardship. The overall performance of the portfolio, particularly government loans, has declined, potentially due to factors such as seasonality, changes in the labor market, resumption of student loan payments, and higher balances of other forms of consumer debt. there is.”
Walsh also noted that MBA expects the unemployment rate, a leading indicator of mortgage performance, to rise gradually from 3.7% at the end of 2023 to 4.5% by the end of 2024.
Other key findings MBA December Loan Monitoring Survey:
- 61.2% of borrowers have given up on repayments due to temporary hardships such as unemployment, death, divorce, or disability.
- 26.8% of borrowers have suspended their repayments due to the impact of the new coronavirus infection.
- 12.0% are putting up with it because of natural disasters.
- 51.7% of the total loans in forbearance are in the original forbearance plan stage.
- 31.5% have their grace period extended.
- 16.8% were deferred re-entry, including re-entry with extension.
Of the cumulative grace exits as of the grace exit for the period July 1, 2020 to December 31, 2023, the following are:
- 29.4% received loan moratorium or partial claim.
- 17.7% of borrowers continued to make monthly payments during the grace period.
- 18.5% represent borrowers who exited forbearance without paying their monthly payments in full and without a loss mitigation plan in place yet.
- 16.0% made a loan modification or trial loan modification.
- 10.7% resulted in a reinstatement in which past due amounts are repaid at the end of the grace period.
- 6.5% paid off their loans by refinancing or selling their home.
- The remaining 1.2% resulted from repayment plans, short sales, certificates in lieu, or other reasons.
- Total current (non-delinquent or non-foreclosure) loans as a percentage of repayment portfolio volume (#) decreased from 95.71% in November 2023 to 95.44% (non-seasonally adjusted basis) in December 2023.
- The five states with the highest percentage of current loans in their repayment portfolios are Washington, Colorado, Idaho, Oregon, and Montana.
- The five states with the lowest percentage of current loans in their repayment portfolios are Louisiana, Mississippi, Indiana, New York, and Illinois.
- The percentage of the total loan repayments completed since 2020 (repayment plans, loan deferrals/partial charges, loan modification) to the current total completed loan repayments is 74.39% as of December 2023, which is 74.39% of the total loan repayments completed since 2020. This was 21 basis points below the current share. It was the latest one for the month.
MBA's monthly loan monitoring survey covers the period December 1 to December 31, 2023 and represents 64% of the first mortgage repayment market (31.9 million loans).
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